Debt

12 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

Debt

NOTE 9. DEBT

Long-term Debt consists of the following at December 31:

(in thousands)	2023			2022
Variable-rate term loans1	$	761,000		$	721,000
Fixed-rate term loans2		210,000			250,000
Revenue bonds3		65,735			65,735
Long-term principal		1,036,735			1,036,735
Debt issuance costs		(1,926	)		(2,324	)
Unamortized discounts		(1,081	)		(1,731	)
Total long-term debt		1,033,728			1,032,680
Less: current portion of long-term debt		(175,615	)		(39,979	)
Long-term debt	$	858,113		$	992,701

1	Variable-rate term loans are at rates of one-month SOFR plus a spread between 1.66% and 2.30% and mature between 2026 and 2033. As of December 31, 2023, the one-month SOFR rate was 5.34%. We have entered into interest rate swaps to fix the interest rate on these variable-rate term loans. See Note 10: Derivative Instruments for additional information.
2	Fixed-rate term loans are at rates between 4.05% and 4.64% and mature between 2024 and 2025.
3	Revenue bonds have a fixed rate of 2.75% and mature in 2024.

TERM LOANS

In December 2023, through a ninth amendment to the Second Amended and Restated Term Loan Agreement (Amended Term Loan Agreement) with our primary lender, we refinanced an existing term loan of $40.0 million that matured with a new term loan that matures in December 2033. The new term loan carries a variable interest rate of one-month SOFR plus 2.30%. In conjunction with the new term loan, we terminated a $50.0 million forward-starting interest rate swap and transferred the value realized from its termination into a new $40.0 million interest rate swap to fix the rate at 3.35% before patronage credits from lenders. See Note 10: Derivative Instruments for additional information on our derivative instruments.

In December 2022, through an eighth amendment to the Amended Term Loan Agreement, we refinanced an existing term loan of $40.0 million that matured with a new term loan that matures in November 2032. The new term loan carries a variable interest rate of one-month SOFR plus 2.30%. In conjunction with the new term loan, we entered into $40.0 million of interest rate swaps to fix the rate at 3.28% before patronage credits from lenders. Additionally, this amendment converted all our then outstanding LIBOR-indexed variable term loans to SOFR-indexed variable rates, plus a SOFR adjustment of 0.10%. We have entered into SOFR-indexed interest rate swaps to fix the interest rate on these SOFR-indexed variable term loans.

On September 14, 2022, through a seventh amendment to the Amended Term Loan Agreement, we refinanced $277.5 million of long-term debt assumed in our merger with CatchMark. The seventh amendment to the Amended Term Loan Agreement provided for a new 5-year term loan in the principal amount of $138.75 million maturing on September 1, 2027, and a new 8-year term loan in the principal amount of $138.75 million maturing on September 1, 2030 (collectively the New Term Loans). The New Term Loans bear interest at a rate equal to one-month SOFR plus 2.0% per annum. In addition, the 8-year term loan provides for a cost-of-capital reset at year five. In connection with the refinance, we entered into two one-month SOFR-indexed interest rate swaps to fix the interest rates on the New Term Loans at 2.50% and 2.66% respectively, before patronage credits from lenders. See Note 17: CatchMark Merger for additional information on the merger.

At December 31, 2023, $971.0 million was outstanding under our Amended Term Loan Agreement.

DEBT ISSUANCE COSTS AND UNAMORTIZED DISCOUNTS

Debt issuance costs represent the capitalized direct costs incurred related to the issuance of debt. These costs are amortized to interest expense over the terms of the respective borrowings.

Unamortized discounts include a $4.9 million fair value adjustment to a $100.0 million term loan assumed in the Deltic merger. The unamortized balance of the fair value adjustment at December 31, 2023 was $1.1 million and will be amortized through the term loan’s maturity in 2025.

DEBT MATURITIES

Scheduled principal payments due on long-term debt at December 31, 2023 are as follows:

(in thousands)
2024	$	175,735
2025		100,000
2026		27,500
2027		138,750
2028		100,000
Thereafter		494,750
Total	$	1,036,735

CREDIT AGREEMENT

On May 18, 2023, we entered into a first amendment to the Third Amended and Restated Credit Agreement (Amended Credit Agreement). The Amended Credit Agreement provides for loans based on SOFR instead of the London Inter-Bank Offered Rate (LIBOR), provides us the option to borrow based on a daily SOFR or term SOFR basis, and provides mechanics relating to the transition from the use of SOFR to a replacement benchmark rate upon the occurrence of certain transition events.

The Amended Credit Agreement provides for a $300.0 million revolving line of credit that matures February 14, 2027. As provided in the Amended Credit Agreement, the borrowing capacity may be increased up to an additional $500.0 million. The Amended Credit Agreement also includes a sublimit of $75.0 million for the issuance of standby letters of credit and a sublimit of $25.0 million for swing line loans. Usage under either or both sub facilities reduces availability under the revolving line of credit. We may also utilize borrowings under the Amended Credit Agreement to, among other things, refinance existing indebtedness and provide funding for working capital requirements, capital projects, acquisitions and other general corporate expenditures.

Pricing on the Amended Credit Agreement is set according to the type of borrowing. SOFR borrowings under the Amended Credit Agreement are issued at a rate equal to the Adjusted Daily Simple SOFR rate (as defined in the Amended Credit Agreement) plus an applicable rate. Base Rate borrowings are issued at a rate equal to a Base Rate, which is a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus one half of one percent, (b) the Adjusted Term SOFR for a one-month tenor in effect on such day, plus 1%, and (c) the rate of interest in effect for such day as publicly announced from time to time by KeyBank as its "prime rate." The interest rates we pay for borrowings under either type of loan include an additional Applicable Rate, which can range from 0.85% to 1.10% for SOFR loans and actual rate for Base Rate loans can range from 0% to 0.10% depending on our credit rating. Additionally, the Amended Credit Agreement provides mechanics relating to the transition from the use of SOFR to a replacement benchmark rate upon the occurrence of certain transition events or elections made by the parties. As of December 31, 2023, we were able to borrow under the revolving line of credit with an additional Applicable Rate of 1.025% for SOFR loans and 0.025% for Base Rate loans. We also pay an annual facility fee of 0.175% on the $300.0 million on our revolving line of credit. At December 31, 2023, there were no borrowings under the revolving line of credit and approximately $0.7 million of the revolving line of credit was utilized by outstanding letters of credit.

FINANCIAL COVENANTS

The Amended Term Loan Agreement and the Amended Credit Agreement (collectively referred to as the Agreements) contain certain covenants that limit our ability and that of our subsidiaries to create liens, merge or consolidate, dispose of assets, incur indebtedness and guarantees, repurchase or redeem capital stock and indebtedness, make certain investments or acquisitions, enter into certain transactions with affiliates or change the nature of our business. The Agreements also contain financial maintenance covenants including the maintenance of a minimum interest coverage ratio and a maximum leverage ratio. We are permitted to pay dividends to our stockholders under the terms of the Agreements so long as we expect to remain in compliance with the financial maintenance covenants. We were in compliance with all debt and credit agreement covenants at December 31, 2023.